Study On Defective Capital Contribution Of Shareholders

The capital contribution of shareholders is an important issue in the corporation law,and is significant to shareholders, the corporation and creditors. To the shareholders, the capital contribution of shareholders is, on one side, the material foundation to bear limited responsibility, on the other side; it's the basis of the shareholders to enjoy rights of the company. To the corporation, the capital contribution of shareholders is not only a necessity to obtain independent legal personality, also the material foundation of operation and development. To the creditors of the corporation, the capital contribution of shareholders is the guarantee of company's debts, and is the material and credit foundation to realize the creditor's rights. Thus, whether or not the shareholder make the contribution of the capital in compliance with laws and articles of association affects other shareholders and the corporation itself, and also the interests of the third-party (creditors).However, defective capital contribution of Chinese corporations is a severe problem, which has been a grave threat to the business safety, and has restricted the foundation of the whole social credits system. For the provisions of old Company Law concerning the constitution of defective capital contribution and the civil consequences are so simple and rough, and the corporation operation in practice isn't standard, the new Company Law has made great progress by improving these provisions. However, the new provisions are still too principle with little maneuverability. Therefore, it is worthwhile to further discuss how to construct a civil consequences system to restrain shareholder's defective capital contribution actions.This thesis consists four chapters.Chapter one: General overview of defects in capital contribution. This chapter introduces the concept, constitution and form of the defective capital contribution. The author holds that if the laws and articles of association definitely regulate shareholder's capital contribution, while the shareholder(s) fails to abide by it with any defects in estates and property rights or the act of investing, which constitutes defects in capital contribution. Then, the author makes classifications in the forms of defective capital contribution and further analyzes some special capital contribution forms.Chapter Two: The status of defective shareholders. This chapter analyzes this issue from two aspects of whether defective shareholders can acquire stock ownership and whether they can enjoy the stock rights. The author's opinion is that defects in capital contribution don't affect the status of the shareholders, but affect them to enjoy the shareholders rights. The defective share rights coming from defective capital contribution are still negotiable, but we should distinguish good intention from ill intention to determine how to bear the responsibility of refilling company capital after transmission of shares.Chapter Three: Civil responsibility of shareholder with defective capital contribution. It's the keystone chapter of this thesis. The chapter analyzes the character of the defective capital contribution based on the legislations of some countries, and discusses the civil responsibility of defective shareholders from three aspects. The author considers that the defective shareholder bears responsibility of breach contract towards other shareholders and the corporation according to laws and regulations concerned. The defective shareholder bears breach responsibility towards the corporation according to articles of association, all shareholders bear capital-refilling responsibility towards the corporation, but other shareholders have recourse rights towards the defective shareholder. Meanwhile, all shareholders bear unlimited or limited joint obligation towards the corporation creditors based on the fact of whether or not the corporation is finally established. The author also discusses the issue of burden of proof.Chapter Four: The regulations of Company Law concerning defective capital contribution, and comments on the new Company Law. This chapter introduces the amendments made by new Company law comparing with old Company Law. The author holds that the new Company Law has made great progress by proving regulations concerning defective capital contribution which has great significance, but still needs to be further improved, especially in the area of remedy in defects, which needs to be further studied and standardized.